Commentary/Mani Shankar Aiyar

Regionalism and a megascam

Satish Agarwal, minister of state for finance in the Janata Party government of 1977-79 and now a BJP veteran of the Rajya Sabha, was only aiming a little below the point at which the finance minister tucks his veshti into his waist when, in the course of a December 17 debate on the Indian Bank scam, he told P Chidambaram Chettiar: 'This bank was originally set up by the Chettiar community who were your ancestors. Do not treat this bank as an ancestral bank of the TMC people!'

The fact remains that although Indian Bank is a bank that belongs to the whole country and is, in fact, one of the giants of the Indian banking industry, the mega scam involving the bank is being treated by the media as a Madrasi affair.

Of the general English-language papers, only The Hindu front-paged the proceedings of the Rajya Sabha, reflecting the sad parliamentary fact that, apart from Agarwal and two Bengali Communists, all other participants in the debate were Tamilians of various political hues. Is the Indian Bank really the South Indian Bank?

There are two separate issues involved in the scam. One is the financial mater involving the many and multi-faceted misdeeds of Indian Bank under its colourful chairman, M Gopalakrishnan. The other is the political matter involving the many and multi-faceted links between Gopalakrishnan and the TMC, as also between Gopalakrishnan and the leader of the TMC, whom we shall call '*' because that is how all reference to him appears in the records of Rajya Sabha, the presiding officer having deemed that his name will be expunged from the records and replaced by an asterisk. Had the presiding officer been as avid a fan of James Bond novels as I am, perhaps he would have allowed us to refer to the nameless leader as M!

The political scandal involving Indian Bank is a regional scandal. The financial scandal involving Indian Bank is a national scandal. Perhaps this is what the finance minister means when he describes the TMC as 'a regional party with a national outlook'!

As regards the financial scam of mega proportions, it will be recalled by all those who lived through the ghastly disruption of the last Lok Sabha for most of the second half of its term that the Joint Parliamentary Committee on Irregularities in Securities and Banking Transactions had in its report of December 1993 identified the poor control and supervisory system of the RBI as the primary systemic cause of the scam. It had made a number of recommendations for strengthening the RBI's control and supervisory system. These recommendations were accepted by government in both the Action Taken Reports submitted to Parliament.

Yet, it would appear that it was the failure to take necessary action that has resulted in the Indian Bank scandal, spread over more or less the same period that has passed since the JPC submitted its report and government furnished its ATR and revised ATR. This is deeply disturbing and calls into question the responsibility of government to Parliament. It is in this larger and broader perspective that the Indian Bank scale needs to be assessed.